Archive for January, 2010

In the statement, Amazon announces that they had a disagreement with Macmillan over going to an “agency” system (in which Macmillan sets the sale price of books, and Amazon gets thirty percent instead of the likely current fifty percent). Macmillan has stated an intent to sell some books higher than the $9.99 that Amazon often sets for new and bestselling books.

Amazon also announces that

“…we will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books.”

This means that Macmillan books will be able to be purchased through the Amazon store (even though they will basically be sold by Macmillan with Amazon acting as agent).

The power you will have is the power you always have as a consumer. Remember that other publishers may certainly follow suit. If consumers continue to buy e-books at $14.99 from publishers who set that sale price, the publishers will come out ahead on this negotiation.

If, on the other hand, consumers buy other books, books that are priced at $9.99 and below, we may see an eventual shifting in who the “big six” publishers are.

This also really helps iBooks from Apple…since, even if you have the Kindle app on your iPad, the price will be presumably the same from both stores for publishers who have arranged this “agency” situation.

Remember that the author may have books with multiple publishers. You may want to contact the author, although they will have very little influence over what Macmillan does in selling their books, typically. However, if you respectfully suggest that they consider other publishers or publishing independently, they may take that into account in future negotiations.

For those of you who are interested, these are the imprints from Macmillan:

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This is a fictional classroom textbook excerpt from the year 2020. It’s my attempt to speculate about what may happen as a result of the apparent disagreement between Macmillan and Amazon which has resulted in Macmillan’s book’s being withdrawn from direct sale on the Amazon website.

Literature 101: the “Missing Macmillans”

The events that led up to what became known as “The Seattle E-party” are a classic illustration of the attempts of old establishments to hold on to power in a changing world. History pivots on individual events. It is not always the direct impact, but the symbolic that guides the future.

In 1843, two brothers formed a publishing company. This company would grow through a century and a half to become a mighty international corporation.

In 1994, Jeff Bezos formed Amazon.com, an online bookstore. In half a decade, it had itself become an important way for people to get what they wanted and needed through the convenience of the internet.

In 2007, Amazon introduced the Kindle, an e-book reader. It became successful as no EBR had done before it. It opened up the market that led to the mainstreaming of the medium that we see today, in 2020.

One of the primary reasons for its success was the then low pricing of $9.99 on popular and bestselling books. Amazon realized that people would need an incentive to try the new technology after hundreds of years of books made from paper. They were willing to take a loss on individual sales in order to allow readers to realize that books were the words of the author, not just the container in which those words were delivered.

This strategy was very successful, and before too long, the e-book market was experiencing explosive growth. It was clear that the percentage of books bought and read electronically was going to become significantly larger over the next few years.

Publishers set their list prices for e-books at the same amount as for paperbooks. While e-books were undoubtedly somewhat less expensive to produce, many of the costs of development were the same.

The publishers saw the public and the retailers embracing the $9.99 price point. Barnes & Noble and the Sony e-book store met the price Amazon had set. Readers began demanding that no e-book should cost more than $9.99.

While reaping the benefits of the increased sales brought about by Amazon’s pricing leadership, publishers saw a risk in the future, when $25 for a new book would seem unreasonable. When readers saw an e-book as a “regular book”, they would be hard-pressed to see why they should pay fifteen dollars more to have a copy of the book on paper.

Ten dollars retail would not be a price that would cover the costs of production of a paper book. The publisher, under the traditional fifty percent wholesale, would only be getting five dollars a book.

Then, the iPad from Apple was introduced. Apple was not a bookseller the way that Amazon was. They knew their expertise wasn’t in setting the price of books. They knew they wouldn’t be able to determine what books could be set at a reasonable profit to allow for the continuation of the $9.99 price point. They also needed to woo publishers to their new product.

Apple offered publishers seventy percent, instead of fifty. More significantly, they agreed to allow publishers to set the price for the books.

Apple, being primarily a hardware maker, was more interested in selling the machine than the content. Apple could be happy with someone just buying an iPad, and possibly a dataplan.

Amazon, on the other hand, was primarily a content provider…they sold books. It was more important to them that people continue to buy books after they bought the Kindle than it was to Apple that people bought books from iBooks after buying the iPad.

The publishers, naturally, wanted the same deal from Amazon that they had gotten from Apple. If they could set the prices at all the stores, they could raise them beyond the $9.99. This would let them keep the prices higher on hardbacks as well.

But wholesalers don’t set retail prices. That eliminates competition between the stores. Retailers lower prices for a variety of reasons. One of the key drivers is to bring people to your store, rather than your competitors. If the “other guy” sets the price to $15 and you set it to $12, more people may choose your store. You may make a lower profit per item, but while the people are in your store, they may buy other things. They may establish a loyalty that keeps them coming back for other items. It might even be worth it to lose money on an item to get the people to come to you.

What were the publishers to do? The answer was to redefine the relationship. The publisher would no longer be a wholesaler selling items to a retailer which would then resell them to the public.

The retailer would be redefined as an “agent” of the publisher. The agent would represent the publisher in dealing with the public.

The agent would get thirty percent of the sale price, which would be set by the publisher. The agent would have less to do than a retailer traditionally did: more would be done by the publisher, such as gauging public demand to calculate successful price points.

Macmillan would take on the responsibility and the power of setting retail prices.

Amazon objected to this. Amazon’s expertise was in retailing. They wanted to the flexibility to price their products where they thought it would be most effective. It was their pricing that had taken the e-book market from a marginal specialty item into the mainstream.

This market was still in the early stages. It was going to take retailing expertise to take it from well under ten percent of publishing to more than fifty percent (where it stood in 2015).

In late January 2010, the same week as the iPad’s introduction, things were at an impasse. Macmillan was insisting that Amazon become an agent of theirs under their terms, rather than continuing in their role as retailer.

The publisher told Amazon that the new deal would commence in March. If Amazon chose to retain their existing role, and price books as they thought was appropriate, Macmillan would withhold the e-book releases from them. iBooks, Barnes & Noble, and Sony would presumably get the e-book releases on the same day as the hardback, if they chose to become agents. Kindle customers would have to wait weeks or months to have the opportunity to buy the same titles.

Amazon could see that, if they gave in, other publishers would follow. E-book prices would rise, perhaps too quickly too prematurely to firmly establish the market. Kindle users would be angry to see a sudden significant rise in book prices. Amazon could not continue to advertise that many bestsellers and new releases would be $9.99.

More was at stake. Paper book prices were going to inevitably increase. Paper would become more expensive, as was the case with many natural resources. The cost of delivery of a physical product was also likely to rise. Eventually, books would become luxury items, as they were before dime novels and penny dreadfuls.

The future availability of books depended on keeping production and delivery costs at a point where they would be affordable to anyone who wanted to read them.

On Friday, January 29, 2010, Amazon stopped selling all Macmillan books at the Amazon website. It was not worth it to carry those titles in order to surrender pricing control.

A hue and cry arose from the populace. Amazon was villified for keeping books from readers. What was obvious to most people was that the book they wanted to read wasn’t available. It was, in a sense, like a public transit strike: all that many people see is that they can’t get to work as easily. The factors that led to the strike are not always first on your mind when you are driving to work with a hundred thousand other people

The issue was not resolved, and the books were not restored to the store.

Amazon took a short term loss, as did authors and readers. Macmillan stayed with their agency deal with iBooks.

Some other publishers took a similar position. Amazon also stopped selling their books.

Readers were angry. Some of them sold their Kindles to buy other devices.

Shares of Amazon dropped. Despite strong performance, the public perception was that Amazon had lost.

The iBooks store opened as expected, and high iPad sales figures were tweeted.

Over time, however, an interesting trend developed.

Readers began to develop new habits. Many of them owned both an e-book reader and an iPad. Given a choice between a fifteen dollar book from an author they knew and a ten dollar book from a well-reviewed new author, they began to explore more possibilities. They loved reading, and their horizons broadened. They began to go back to read classics (many of them, such as Kipling, Carroll, and Tennyson had ironically been published by Macmillan in the nineteenth century).

Price alone does not a market make, though. Nothing would make consumers totally forego the new and the familiar.

Fortunately, another factor was the growth of independent e-publishing. Reluctantly at first, some established authors began to publish books without the traditional publishing houses. This was not an easy decision. They were grateful to the companies that had mentored them, that had first made them known. They had old friends in the publishing industry, especially editors who had helped them make their books better…who had made them better authors.

Slowly, though, some brave authors just wanted to reach their readers. They didn’t want to be part of the politics of publishing any more than they had wanted to do the things publishers had done for them. They were artists, for the most part…business was not what had brought them to create.

A new type of “author’s partner” rose. The author retained the rights, and published the books through independent platforms, like Amazon’s own Digital Text Platform, and Smashwords. These Author’s Partners, sometimes people who had left successful careers with the publishers, would edit, proofread, and handle the legal issues. The authors, in turn, would pay them for these services…sometimes a set fee, sometimes as a percentage of the sale.

This was possible because independents received a much higher percentage of the sale of the book than they did with a traditional publisher. Once the twin barriers of production and distribution were removed, it became possible to publish without a giant corporation. The author could share those revenues with others who contributed to the book.

Authors also had retained the rights to many “backlist” titles, some of which had been allowed to fall out of print by publishers, for which it didn’t make economic sense to keep physically printing small runs. Readers who wanted something that had not read by a well-known author had that need met…even if it had been written twenty years earlier.

Legislative changes around so-called “orphan books”, those that were still under copyright but for which rightsholders could not be located, resulted in the republication of books as e-books which had not been available for years. These orphan books did not require rights negotiations, and were often published by independents.

Independent publishers, who had found difficulty getting into physical bookstores, were able to compete in the digital world. Some of those which had a small presence in the early 2000s became power players in the 2010s.

These factors created a new variety of reading options:

Well-known authors who independently published new works

Established authors who independently published backlist works

Unknown and lesser known authors who independently published new works

Public domain works often made available for free

Orphan works made re-available

Independent paper publishers which moved aggressively into the e-publishing market

In this new, more complex marketplace, Amazon thrived. By being the only major distributor with lower prices, they bounced back from the temporary loss of the “Seattle e-party” of 2010. Publishers who embraced the new technology also succeeded, and readers became less tied to specific types of books.

This led to the relatively inexpensive and worldwide distribution of books which we see today in 2050.

—

Is this really how it would go? Maybe, I’m just speculating. :) It’s possible that Amazon’s e-book business will simply be crushed by the new model, and that they get out of that field. They have a lot of segments to their business, including electronic storage. I think it’s unlikely, though. My guess is that Amazon will continue to be a major player. I do think independent publishing of some sort is going to become an increasingly important factor. That is what I think Macmillan may be missing. They may feel like they (and the other major publishers) are the only purveyors of what the public wants to read…right now, they certainly have the lion’s share. I’ve always felt that industry leaders lose that position not when they underestimate the competition, but when they overestimate the public’s loyalty to them.

I have invited Macmillan to contribute a statement to ILMK. I like publishers…I have bought books because they came from a specific publisher, for example. In my ideal world, nobody loses, but it just doesn’t always happen that way.

I’m sure some of you will see the possibilities very differently. The iPad looks cool: it has color and video. Apple has a pretty good track record, and if someone wanted to give me an iPad, I’d take it in a heartbeat. It’s possible that people are willing to pay fifteen dollars for an e-book, and that they don’t care that much about the passive lighting and long battery life of EBRs.

This is fiction, not prediction. Yes, I have a message in it, but I freely admit that it may go very differently from this story. I’m interested in what you think…feel free to comment on this post and let me know.

It’s a fascinating article, assuming it is accurate. This is a key point:

“Amazon and Macmillan both want a healthy and vibrant future for books. We clearly do not agree on how to get there.”

Um, yep. There appears like there might be a slight divergence of opinion…you know, like that held by Dr. Seuss’ East and West-going Zax, or Frank Gorshin and that other guy on Star Trek. :)

John Sargent, by the way, is presumably John Turner Sargent, Senior, who is the CEO of Macmillan. I can’t verify that this letter is authentic, but let’s accept that as a postulate.

If it is, it’s extraordinary. Sargent reports meeting with Amazon on Thursday, and giving them a “proposal”. I have to say, it reads more like an ultimatum. Either switch over to our new “agency” model, or there will be a serious “windowing” (I’m guessing this is meant to be winnowing, although it may be an industry term with which I am unfamiliar) of Macmillan titles for Amazon. EDIT: Thanks to reader iPhone2Droid (see comments) and a bit of research, it appears that “windowing” is what I usually refer to as a “staggered release” strategy. That’s the practice of releasing e-books significantly after their hardback editions.

So, either change the way you business with us, or lose out on our titles getting a simultaneous release in hardback and e-book.

When I say “change the way”, we aren’t just talking about a different wholesale rate. They are wanting, apparently, for Amazon to stop acting as a traditional retailer, and start acting as their “agent”. As an agent, thirty percent to Amazon would be generous…as a retailer, fifty percent would be more expected.

That’s not particularly good for anybody, of course, but the way this reads is that Macmillan was threatening Amazon, and Amazon made a pre-emptive strike.

The article isn’t exactly clear to me: it says Amazon would make more money under the agency plan, and Macmillan would make less. I’m guessing they might be saying that Amazon would make more money because they would force Amazon to sell the books at higher prices.

The article includes this:

“At first release, concurrent with a hardcover, most titles will be priced between $14.99 and $12.99.”

Let’s look at the math.

Amazon currently pays Macmillan fifty percent (presumably) of the digital list price. Let’s say that is $25. Amazon would pay $12.50 per download. That doesn’t mean Amazon makes $12.50 in direct money…they may set the sale price (which is the part they control) at $9.99.

Under the new plan, Macmillan sets the price at $14.99 for the same book (for example). Amazon would get thirty percent of that…it would be about $4.50 per download.

Yes, Amazon makes $4.50 versus losing a couple of bucks on a $9.99. So, Mr. Sargent’s set up on the money for Amazon seems to be true. Macmillan does make less under the new plan. They get $12.50 under the old plan (if the DLP is $25 at fifty percent) and $10.50 under the new plan.

However, Macmillan gets to set the sales price. That’s not the traditional method. Macmillan can standardize the price between Amazon and, oh, iBooks for example.

I think Amazon is right to not want this…why blow the competitive advantage? Under the current set-up, it looks like the Kindle store (which should be available on the iPad), would have books for significantly lower than the iBooks store.

Steve Jobs supposedly said that iBooks and the Kindle store would not have different prices. Check, for example, this article.

Jobs would be right if the choice is have the same prices or have no books.

I think competition is good. I suspect that the Department of Justice might agree with me, although I don’t claim to know the antitrust laws well enough.

Do I hate that the Macmillan books are out of the Amazon store? Yes. Options are good. There are good books from Macmillan. Importantly to me, Macmillan was not blocking text-to-speech, I believe.

However, I would hate it more if publishers set sale prices, and standardized them at all the stores. Yes, I’m a former book retailer (in a bookstore), so I may be prejudiced to side with the retailer on this.

What happens if this keeps going? Do more publishers get pulled out of the store? Or, do authors say, “I don’t want to be part of this game…I want people to read my books.” That’s the missing part in the equation for Macmillan, I think. Will Amazon still need them a year from now? Maybe, maybe…but it’s a big chance to take.

A lot of authors really like their publishers…but they may like having a clearcut way to reach readers more.

They are the retailer, and they certainly have a lot of influence with the wholesalers (publishers, in the case of books).

Personally, I’m a tad uncomfortable with Amazon dictating the contents of books. I wouldn’t want them to mandate an active table of contents, for example. Oh, they would be within their rights to say we aren’t selling anything without chapter marks or with page numbers in the middle of the screen due to poor conversion, but I’d rather have them buy and sell the books or not. I love their seven-day return policy on e-books, and I’d rather let the market decide who wins and loses.

That said, it’s fine for retailers to choose not to carry “cheap looking” products, just to use one decision factor. The Dollar Store can carry them, but Nordstrom’s may choose not to do that.

It is becoming a war, though, in some ways with Amazon and some publishers. Amazon backed down on text-to-speech, allowing publishers to block that access. That was almost a year ago, in February of 2009. They don’t seem to be in such a conciliatory mood lately, though.

We’ve seen them pull a publisher before. MobileReference, which published the Orwell book that Amazon removed from people’s Kindles, saw their titles unavailable through Amazon for awhile.

Okay, that might seem reasonable. Maybe Amazon wanted to verify the rights status. The MobileReference books (outside of the Orwell book) were eventually made available again.

However, New York Times bestselling author Douglas Preston (who sent me a statement for ILMK readers that appeared in this blog yesterday, contacted me this morning with a heads-up.

Mr. Preston sent this:

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“Hi Bufo,

You and your readers may be interested to know that Amazon has stopped selling IMPACT and some of my other books in hardcover. I am told by insider sources this is in retaliation for the delayed Kindle release of IMPACT<snip>… .

As a result, IMPACT will probably drop off all the bestseller lists, since Amazon is one of the largest reporting booksellers. This will really hurt my sales.

Doug”

—

(The “snip” represents a place where I excluded part of the e-mail)

Well, I went to check.

Indeed, the hardcover of Impact is not available directly from Amazon (although you can get it from third-party vendors through the Amazon site), and it was yesterday. The Kindle edition, which was available for pre-order, is not available at all.

So, one question was, how widespread is this? It is just this one book? If that’s the case, there could be something specific to it. Is it all the books from that publisher (which might imply a dispute)? Does it involve more than one publishers, and if so, what do the publishers have in common? Is it tied to the author?

Factor: the author

While things could be in process, this doesn’t seem to be against Mr. Preston. At least some other books from Douglas Preston are still available in the Kindle store. Unfortunately, the two I found right away come from a publisher that blocks text-to-speech, so I’m not going to name them. Logically, though, this takes Douglas Preston out as the sole variable.

Factor: the publisher

Impact is published by Forge, which is part of Tor, which is part of St. Martin’s Press, which is part of Macmillan, which is part the Holtzbrinck group. I think that’s the right hierarchy, although my terminology here may be imprecise.

I checked five Forge books, which I found using Jungle-Search to generate this search:

Same result: not available directly through Amazon. It’s probably worth mentioning that there were 189,150 results in that search. I only checked a few, of course, but there were some really big names in there.

This seems to suggest that it is the publisher.

Hypothesis: it’s publishers using a staggered release strategy

I also checked Simon & Schuster, since they have also announced a staggered release strategy (hardback first, e-book later for some popular titles).

It’s hard to really isolate the variables here, and there could be something else that connects the unavailable publishers.

I do have to say that, if this is a negotiating tactic on Amazon’s part (and this would be really playing hardball if it is), I wish they would do something similar with companies that block text-to-speech. Is Amazon losing a lot of money because of the text-to-speech? Perhaps not. Are they losing more because of staggered release? That could certainly be true.

Staggered release affect other e-book retailers as well, presumably. Text-to-speech is a competitive advantage for Amazon over the nook (sic) and the Sony. I’m not 100 percent sure on the iPad, though…it has some sort of voice capability, but I’m not sure how that will apply to e-books.

For e-books, Amazon is likely the big dog. They may be able to pressure publishers to change their release strategies, although I doubt they will keep these books out of the store for very long.

Of course, this may be just some sort of database fluke, and not negotiating. Supposedly, when Amazon was accused of dropping LGBT (Lesbian, Gay, Bisexual, Transgendered) books from bestselling lists, they claimed an error. That explanation seemed possible to me in that case.

This, though, may be Amazon making a point…like when cable providers stop showing popular shows to negotiate.

The e-book market will be largely shaped this year. Amazon may be a very large part of how that world is shaped, even though there are significant competitors. In fact, are the publishers being blocked because they want to Apple’s iBooks? I think that’s unlikely…that would be tricky legally, I think, if a company says, “You sold to them, we aren’t buying from you.” Negotiating over release strategies? I’d say that’s legal.

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Douglas Preston is a New York Times bestselling author. While he is probably best known for his thrillers written with frequent collaborator Lincoln Child (including Relic, which is not yet available as a Kindle edition), I first became familiar with him for his non-fiction book on the Smithsonian, Dinosaurs in the Attic (which has also not yet been Kindleized). However, Preston is well-represented in the Kindle store, with more than ten books:

I recently contacted him, to see if he would like to make a statement to the readers of I Love My Kindle. E-books are changing publishing, in a way as rapid as the genetic manipulation about which Preston has written. Authors, publishers, retailers, and, yes, readers are all talking about the changes this new medium will bring to the way books are created, distributed, and how we read them. Since people truly love books, emotions can run high about them. Looking at comments on public forums, people will swear to “never do this” or “never do that” because of a decision someone has made with which they disagree.

It’s a good thing that people care this much about the topic, in my opinion. While I wish that everyone would always express themselves in a respectful manner, the depth of passion speaks to how important books still are in today’s world, and in the future of our culture.

Mr. Preston’s most recent book, Impact, has been the subject of postings in the Kindle community. Published in hardcover by Forge on January 5 of this year, the Kindle edition is scheduled for a May 4th release.

I appreciate the author taking the time and making the effort to respond to my e-mail, and giving me permission to share it with you. I think you will find his comments thoughtful, insightful, and heartfelt. Outside of that assessment and this brief introduction, I will let his words stand for themselves in this post. I may comment on it later, and you are certainly welcome to comment on this post as well.

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Hi Bufo,

Please feel free to use my email in your blog. To answer your questions, I have always deferred to my publisher when it comes to decisions involving business, pricing, and marketing. I am a writer, not a businessman. I could second guess their decisions and raise a stink about something and probably get my way, but I have always shied away from playing the difficult and demanding author. That’s not my way.

My publisher, my agent, and all the book sellers I have spoken to say the $9.99 ebook will destroy the publishing industry as we know it, since it doesn’t cover the creative content of a book. So I do agree with my publisher’s decision to delay the ebook release.

I have been discussing this issue almost constantly since the ebook release, with my agent, publisher, with Lincoln Child, and others. I wish I could see a clear answer but the bottom line is this: the $9.99 Amazon ebook price, if introduced at the same time as the hardcover, will essentially end the local independent bookstore the same way Wal-Mart ended local businesses. It may bankrupt my publisher. It will make it almost impossible for beginning writers to get published, no matter how good their work is. It will end the careers of many midlist authors. So I would ask these outraged Kindle owners if they are willing to trade all this for their “right” to have a cheap edition of a best-selling book on the day of publication.

As for the public comments, they can be sorted into two categories: the angry shouters (a minority to be sure) and more thoughtful Kindle owners (the vast majority) who naturally would like to be able to acquire the ebook on the day of publication and wonder why the ebook release has been delayed.

I would never bypass my publisher to publish an ebook with Amazon directly, and I’ll explain why. First of all, my contract would not allow it. But even if it did, I would not consider this. Yes, I would certainly make more money. But what about all the work my publisher has put into the book? What about all the support I’ve received these many long years from my publisher, who sent me on tour when I was an unknown author, who advanced me money when I had none to give me time to write, who labored over the manuscript and helped me make it right, who edited it and designed a beautiful cover for it? Would it be fair for me to then take this book, which is as much a product of their good work as my own, and contract with Amazon to publish the ebook, bypassing them and stealing all their value-added efforts for myself? Amazon seems to think that a book just appears, fully formed and ready to read. Not so. Every writer needs an editor and publisher.

Clearly, the future of the ebook is very promising for the manufacturer of the ebook device and the retail seller of the ebook edition. It seems to me that denying consumers what they want (which is a cheap edition on the day of publication) may be a losing strategy. What is the answer? To ask the American consumer to pay the real value for something, as opposed to the cheap Wal-Mart discount value? Frankly, I don’t have an answer, except to say that the sense of entitlement of the American consumer is something that, in my opinion, is damaging our country. From the price of energy to fast food to cheap Chinese goods to home mortgages and on down, it seems that many Americans have come to feel they have God-given “rights” about getting what they want, when they want it, at a price so cheap it doesn’t actually cover the real cost. From an economic point of view, this attitude contributes to our vast trade deficits, our dependency on China and Saudi Arabia, our oversized contribution to global warming, and the decline of our family farms and our industrial sector. I believe this is a serious problem, of which the demand for the cheap ebook is only a small, but telling, symptom.

Regards,
Doug

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When told that I would be publishing the above statement in the next couple of days, Mr. Preston added this comment:

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I will look forward to it. There are a few other points I’d like to make. First, I have no publicist as some are speculating on the threads. If I sound rude, it’s because I’ve been rude, and if I sound reasonable, it’s also because I’ve been reasonable. I would never allow a publicist to go out there and pretend to be me. I like interacting with readers directly and honestly. And if I’ve responded rudely, for which I am sorry, you can be sure I was responding to an an even ruder email or comment. I’m a mild person and my mother tells me I’m quite nice, actually…

Best,

Doug

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I’d like to thank Amazon Kindle community member magznyc for starting this thread, which led to me contacting Douglas Preston for this article. Mr. Preston said that I could include excerpts from the e-mail that was reproduced there, but I would rather that it stands as a piece. He did want to emphasize one point: he and Lincoln Child are both Kindle owners, and he described it to me as a “marvelous device”. He said specifically, “We are not at all against the ebook — on the contrary.”

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Okay, I’ll back off on the iPad information shortly, unless something big breaks. I just had a reader ask me if I’m switching to the iPad. Nope, not for me, at least not as an EBR (E-Book Reader). I love my Kindle…I like the look of the E Ink, I like the long battery life. I think that the iPad may find a real market with people who “should” have been carrying a laptop places, but found that a burden. I think it’s not for the super-techy, it appears to have some limitations that will affect that adoption.

However, if you simply think it would be cool to have web access and e-mail and such when you are out at the park or eating lunch, I think it may find admirers. People for whom the iPhone was too small, and a laptop was too big. I think Baby Boomers may possibly be part of that group. For readers, though, it seems like a dedicated EBR is a better deal. For one thing, I’m not that into monthly payments…I even bought the one-time lifetime subscription for Tivo. :)

In this post, I’m going to compare the iPad to some other items, to see which one might come out ahead. That’s going to vary, of course…individual needs will make a difference. We also will learn a lot more about the iPad in the coming months, but I’m going to make some guesses now.

“In this corner…the iiiiiiiiiiPaaaaaaaaaaad!”

“Weighing in at 1.5 pounds, and wearing a black Apple cover, the iPad features a 9.7″ backlit touch screen. This feisty newcomer packs a punch in its featherweight design. It promises e-mail, e-books, and e-everything else.

I don’t think the iPad is that much of a direct threat to the 6″ Kindle 2, at least for readers. It’s backlit, and people just haven’t bought into backlighting for long term reading. It only claims ten hours of battery life, where the Kindle can run more than ten days. It should be able to use the Kindle app to get books from Amazon, but the iBooks store looks more limited in choices, and more expensive. Speaking of expensive, the iPad is more expensive, and needs a monthly dataplan. The K2 wins this one.

Kindle, Too

This is a different category. If you get an iPad, you may decide that you don’t need a Kindle, too, even though reading on the iPad isn’t as pleasant. It’s like considering whether or not you really need a second car, in a sense. You might be able to make do with a kind of clunky second, or take public transit, rather than buying another nice car. Reading is not the iPad’s main function…the iPad is for Internet, mostly, in my opinion. However, lay out more than five hundred bucks for an iPad, and you might not want to put out another $250 for a Kindle.

At $489, the KDX is in trouble against the iPad. I’m only talking about perception here, but people are going to say, “$489 and no video?” Yes, some people will still want the KDX, but they’ll need to be pretty savvy to see the advantage. The K2 starts out more than $200 cheaper…that’s enough even without technical expertise. When the prices are that close (even if it’s only for the cheapest iPad without the dataplan figured into it), that’s going to invite closer analysis. The KDX would be better for some people, but without editable native pdfs, it’s going to fall short for a lot of them. The iPad wins this one.

The iPad may cause a problem for this upcoming EBR from Spring Design. It has E Ink, which is a plus, but it also has web-browsing on a little LCD screen. I thought it might carve itself a nice little slice of the EBR pie, and it might. If web access is important to you, though, you may just choose that iPad.

Laptops

This is where I think the iPad can take a solid slice of market share. Why do a lot of people want a laptop? Large screen web access. However, for many users a laptop is just too big. When you have a laptop on the table next to you in a restaurant…well, you look like a geek…not that there’s anything wrong with that. ;) Two or three hours of battery time doesn’t cut it for a cruise on the bay, either. Is the iPad as good as a laptop? Nope…but do you need it to be? I think there is a solid group of non-techies who just want to check e-mail, watch a movie, go to a website, maybe do a little word processing for work, who might prefer the sleek iPad. For non-geeks, I have to give this one to the iPad.

Netbooks

This one is closer…battery life is longer than a laptop. However, the iPad is still much slimmer and easier to tote. It’s also cooler, and comparably priced (well, pretty close, anyway). If someone recently bought a netbook, they may not make the switch. But if somebody was just thinking about a netbook, the iPad is going to loom large.

Slips in a pocket…that can be important. Some people, though, have an iPhone mostly to be able to get on the web…and they haven’t been entirely happy with the iPhone for that. This one is going to depend on whether you want a phone or a webportal. If you want a webportal, you’re going to think about the iPad. However, the iPad is much more expensive (since you usually get an iPhone with cellular service). iPhones will still sell well…but there will be some share siphoning here.

The touch is a lot smaller and more convenient, but it has some other significant similarities. A lot of people are going to prefer the smaller price and size of the iPod touch, but I can certainly see some people moving up to the iPad.

Spider-Man

Well, they are both webslingers, but I have to give this to Spidey. For one thing, he has a camera. ;)

One of the complaints that Kindleers have had is the lack of support for many languages.

The iPad says it supports Russian, Simplified Chinese, and Japanese…three for which I’ve seen repeated requests.

It also says it has “Dictionary support” for those…suggesting it, well, has a dictionary. :)

Accessibility

They say it has a VoiceOver screen reader. Not too much of a surprise…Macs have had text-to-speech for a long time. That doesn’t mean it necessarily works with book files, though, and the blocking that has been applied by some publishers in the Kindle store may work with the iPad as well.

They mention it will go “white on black”, which may help people who find the Kindle’s contrast too low.

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Highpoints: it’s called the iPad, no E Ink, does lots of computery things, the New York Times looked good

There’s been so much speculation about Apple’s announcement that was scheduled for 10:00 AM Pacific today, January 27, 2010.

Apple can revolutionize a market…or not. Not everything they do has been a hit, but some things have really changed how we consume entertainment and carry on communications. The iPod and the iPhone are two well known successes. The Newton PDA platform? Not so much.

Before we even see it, we can speculate on a some of the impact it might have.

Right now, there really isn’t a good electronic device on which to read magazines. E Ink still just isn’t evolved enough to allow for the kinds of images we see in magazines (and newspapers, for that matter). Laptops are too clunky (did we ever think we’d say that?) and EBRs (E-Book Readers) aren’t sophisticated enough for large, color pictures. I think that there is room for a device that does that…but not necessarily at more than $500.

Apple is known for making things easy to use, and we can guess that a successful launch from Apple will bring together technologies in a simple manner.

They are also known as a retailer of content…hello, iTunes store. Amazon is primarily a content provider…Apple is primarily a hardware provider. That may have a lot to with how this all breaks out for the people who read. Do readers care more about the content, or the hardware, or is it both? Will Apple make deals with content providers that may be less profitable than the deals Amazon would make in order to sell more hardware?

Apple’s been doing very well lately, as has Amazon. With the dotcom bust, would we have guesed that we’d be talking about two very successful tech companies in 2010?

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Live reactions

I’m going to apologize here if this gets a little choppy. I’m taking a break at work to watch the Gizmodo live blogging, so I’ll have something to tell you right away. I’m sure I’ll be talking more about this in the next few days and weeks, but I want this to get out right away…people have been burning to know.

Um…they’ve put up a slide with Moses with the tablets…very humble. :)

They are talking about comparing laptops (Powerbooks) and iPhones, and the need for a third device. The device needs to be better at certain tasks:

Ten hours of battery life…playing videos. Sorry, as a Kindle owner…ten hours…yawn. However, I can’t tell you I could get ten hours out of the Kindle doing text-to-speech…you know, mental video. ;)

They are downloading and run apps right from the iPhone app store. That’s impressive…that means Kindle books. They are small, but they have a software trick to double the size without much lost resolution (apparently), and apps can be designed for the larger screen.

The SDK (Software Developer’s Kit, I think) can be downloaded from Apple.com right now. The store will have a separate iPad section, but iPhone apps will be okay. That gives it content immediately…you can use the “More Cowbell” app, I assume. ;)

They are going to show off some games designed for it.

Nova is demonstrating playing a game using this very responsive touch screen. They can interact with things in the environment (like opening a door or throwing something).

Okay, here comes the New York Times…now we are getting back to Kindle territory.

Hmm…wow, that does look pretty much like a newspaper. They say you can alter it, though. Change the number of columns, or go to a slideshow. You can increase the text size. It will run video…sort of like The Daily Prophet in Harry Potter (still not available for the Kindle).

None of that is that different from going to a website…but it is a much more convenient package.

They are showing off a painting tool…the image looks good, a bit like a Miyazaki image. I’m guessing most people can’t accomplish anything like that, though.

That’s from an app called Brushes.

Next up is Electronic Arts. I taught a couple of software classes there at one point. Cool place. EA is showing off a racing game, which is (of course) also touch-enabled.

Major League Baseball (which is very techie, by the way) is showing off next. You can tap a player to see a baseball card…but can stick it in the spokes of your bike? ;)

They apparently let you choose your announcer (there is usually one for the home team and one for the away team, right?) while you watch live.

Here we go…the new app, iBooks!

They say, “Thanks, Amazon” and show the Kindle…and now, we will proceed to kick your bootay. (I added that last part). ;)

It has a picture that actually looks like a bookshelf like you would have in your home…um, maybe something from Ikea.

Weirdly, the book image looks like it has pages…like a photograph of an open book, rather than just of a single page. I think that look odd…like you are looking at a book in a display case under glass, rather than like you are reading one on a Kindle. You’d get used to it, though.

They show the Kennedy book and other bestsellers.

True Compass costs $14.99…that’s five dollars more than Amazon. The pictures look good, like in a book. Direct chapter access from the table of contents. Change the page by touch, if you want.

The bloggers are mentioning EPUB, but I don’t see anything in the presentation about formats.

Next, iWorks. That includes a word processor and presentation software…sort of like Microsoft Office, kinda. It’s been around about five years, I think, and includes a spreadsheet.

The presentation isn’t over, but my break is. :) I’m going to send this out, but I may update it later.

Thanks to Gizmodo for liveblogging it publicly!

My quick summary…it’s a super-duper iPhone, almost a laptop in capabilities but lighter and easier. It’s not an EBR, although people will read books on it. The books being that much more expensive won’t get people who just want to read to buy it…but if you already have the iPad, you might forego a Kindle.

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I got an alert to a news story from engadget, but then went to check it out myself.

It’s a site that seems to copy Amazon…same colors, a smile without eyes (not a half-smile, though), and…an EBR (E-Book Reader) that looks like a Kindle!

It’s so close it looks like a fake site. However, I could confirm with just a little bit of research that it’s a real place. It’s been around since at least July of 2009…maybe longer. The site has copyrights going back to 2007.

Their EBR is called the Pi, and will start shipping the 22nd of February of this year (yep, I’m adding it to the timeline).

Check it out: the similarity in the way the site and the Pi look to Amazon and the Kindle is spooky:

It only has 8 grayscale to the Kindle’s 16…but it does have an SD slot.

It comes with headphones!

It says they’ll have 1 lac (which I think is 100,00) e-books, and they show some biggies.

It has support for local languages, including Hindi and Sanskrit.

They say you can sort your books by category…nice!

Free shipping to India!

The pre-order price is 9999 rupees… about $217.

The price for e-books seems reasonable…when you are looking, 200 rupees is about $4.34.

It’s not entirely clear from the product page whether or not it is wireless downloads. They say:

“Buy an eBook from Infibeam’s eBook store, download it to your Pi and start reading within seconds.”

That sounds like wireless, but they don’t tell you one hundred percent.

I have to say, I was initially just drawn to this by the humor of it looking like a Kindle…but if this is what it appears to be, it could be a serious threat to the Kindle in India. ..that’s more than 1 billion people…something like 18% of the world’s people.

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